A fading photo tossed on an empty bed is all that remains of the interrupted lives in Spinkai, a desolate Pakistani village that has endured the wrath of the army's "collective punishment".

In the image a laughing young man in a jet-black turban brandishes his rifle like a trophy. Beside him stand two little girls in bright frocks, giggling with glee. Now they have fled, and so has everyone else.

An estimated 200,000 villagers have been displaced since the Pakistani army attacked the mountain redoubt of Baitullah Mehsud, the leader of the Pakistani Taliban and a suspect in the assassination of Benazir Bhutto four months ago.

The operation was called zalzala - Urdu for earthquake. One of the first villages they hit was Spinkai, nestled under a line of jagged hills at the gateway to the Mehsud stronghold in South Waziristan.

The army swept through with helicopter gunships, artillery and tanks that crunched across a parched riverbed. After four days of heavy fighting - 25 militants and six soldiers died, the army said - the militants retreated up the valley.

In their wake, the soldiers said, they discovered bomb factories and schools for teenage suicide bombers. Waziristan is the hub of a surge in suicide attacks in Pakistan and Afghanistan.

The local people had already fled to refugee camps in nearby North-West Frontier province. But army retaliation against them - for allowing the militants to operate - was swift and harsh.

Bulldozers and explosives experts turned Spinkai's bazaar into a mile-long pile of rubble. Petrol stations, shops, even parts of the hospital, were levelled or blown up.

Four months later the villagers are forbidden from returning home. Their wheat is rotting in the fields. But Pakistani commanders insist they have been merciful in their application of "collective punishment" - a practice invented by the British who demarcated the tribal areas over a century ago.

Walking through the bullet-pocked rubble, Brigadier Ali Abbas pointed to alleged bomb factories. His troops had recovered 12 detonation-ready suicide jackets, he said, and many others in preparation.

"As per the frontier crimes regulations I should have destroyed everyone's house, but I didn't. Call it my weakness. Call it kindness," he said with a wry laugh.

As a fresh round of peace negotiations with militants stumbles forward, the Pakistani army wants to show that it means business. On Sunday a small group of journalists were flown to the tribal belt, where officers denied suggestions that they were "going soft" on militants.

"This is a complete siege of the Mehsud area," said Major General Tariq Khan, one of three battlefield commanders.

But the militants are beaten back, not defeated. Khan admitted that his troops had withdrawn to fringe positions, such as Spinkai, leaving Mehsud and his men free to roam the centre.

The army is also reacting to intense American pressure. In recent months US officials have vocally re-aired their view that the tribal belt is a major Taliban rear base for attacks in Afghanistan, and a headquarters for al-Qaida's high command.

In March the CIA director, Michael Hayden, warned that the lawless area presented a "clear and present danger" to the west, and was the likely source of any future attack on America. On Sunday the new prime minister, Yousaf Raza Gilani, met President George Bush on the fringes of a conference in Egypt to discuss the situation.

The US is bankrolling the operations in North and South Waziristan, giving at least $5.5bn (about £2.8bn) in military assistance since 2002. But the Pakistanis have good reasons of their own to end the tribal imbroglio. A number of suicide attacks on military targets over the past year originated in Waziristan. The latest blast on Sunday, at a military bakery in north-western Mardan, killed 13 people and wounded 20.

On Saturday the Taliban released Islamabad's kidnapped ambassador to Afghanistan, Tariq Azizuddin, after 97 days in captivity. He was set free from a house in Mehsud territory.

But US patience with Pakistan is wearing thin. Last week a US predator drone fired missiles into a house in the tribal belt where an al-Qaida member was allegedly staying - the fourth such attack this year. Pakistani public opinion was outraged.

"Completely counterproductive," said a military spokesman, Major General Athar Abbas, in Spinkai. "It is helping none of the sides."

Cooperation is hobbled by the two countries' divergent perspectives. Pakistani officers privately consider the Taliban insurgency as a Pashtun rebellion against a puppet, western-backed government in Kabul. And they make it clear that their priority is to quell violence inside Pakistan - and not necessarily hunt for al-Qaida fugitives.

On Sunday Khan showed journalists a video, seized near Spinkai, of a masked man giving bombing lessons to a class of child jihadis wearing white headbands. Later in the clip young fighters are seen beheading a captured soldier in gory detail.

The Americans are nervously watching peace negotiations between the newly elected civilian government and Mehsud. Previous talks, notably in September 2006, collapsed within months.

In Spinkai officers said they believed collective punishment had brought Mehsud to the negotiating table. "He is being forced to the table because of this destruction," said Lieutenant Colonel Asmat Nawaz, standing before a crushed house.

But few would admit another possibility - that their iron-fisted action would trigger a new wave of local anger, and a fresh generation of Baitullah Mehsuds.